Cup Challenger Can Keep Himself Afloat : Sailing: Industrialist Koch doesn’t need to solicit contributions from corporate America as Conner does.

As Bill Koch gobbles up one rival America’s Cup defense syndicate after another--Triumph America, Beach Boys USA--one must wonder if Dennis Conner is next. There is nobody else left.

Conner may be even more defensive than usual because Koch brings something new to the Cup game, as it’s played in the United States: money.

He is an energy industrialist from Palm Beach, Fla., via Wichita, Kan., and his presence as head of the America-3 syndicate reinforces sailing’s image as a rich man’s sport, an image Conner insists is false.

Conner, the son of a blue-collar worker at Convair, has said, “My guess is if you check the average wealth of the crews on the boats, their total net worth wouldn’t be six figures. Compared to other sports, sailing at this top level is a poor man’s sport. They might be the poorest athletes there are. I’ll bet not four or five of the 200 were down there on a boat (in Australia in 1986-87) because their parents were rich.

“Their wasn’t one in our program. Our people made it on merit. From the standpoint of their commitment to their sport, they’re way underappreciated and underpaid.”

Of course, Conner has cashed in on his success since regaining the Cup at Fremantle.

“I don’t mind the image of being a successful businessman,” he says. “If I can endorse a product or give a speech on winning, that’s not sailing. I don’t feel like I have to make any apologies. I’m not going to be a big shot. I’m going to keep sailing.”

But while Conner and the others who folded have had to hustle an indifferent corporate America to support campaigns that will cost $15 million to $20 million, Koch got his first money the old-fashioned way: He inherited it.

Koch, 50, says disarmingly, “When you start talking about money, I get nervous.”

He has been described as a “billionaire,” but the Forbes Four Hundred lists him short at $650 million. Koch doesn’t quibble.

“I wish I were a billionaire,” he says.

Koch, a chemical engineer with three degrees from the Massachusetts Institute of Technology, entered big-time sailing in 1984. He peaked last year when his 85-foot Matador-2 dominated the world maxi series.

Matador-2 was the product of a six-year research and design program more thorough than that for the average America’s Cup project. Koch’s team built 20 22-foot models merely for tank testing. The new America’s Cup class boats are 10 feet shorter than maxis but have similar technology, and when some America’s Cup syndicates approached Koch seeking design data he figured he was on to something.

“I thought about it and decided, ‘Why not go for it myself?’ ” he said.

Koch could have hired any number of world-class sailors for the maxi series but was at the helm himself most of the time--45 of 63 hours, according to calculations by his tactician, Gary Jobson. For the Cup campaign, Koch will have Jobson and Buddy Melges--veteran, successful sailors in their own rights--but still plans to steer the boat himself.

“I like to do the driving,” he says. “I get my kicks out of that.”

That might be what Conner is counting on. Conner welcomes Koch to the Cup for the competition he will need to tune up for the ultimate challenger, yet he doesn’t regard Koch as a rival for corporate sponsorship funds--or, perhaps, as a daunting competitive rival on the water. In the America’s Cup, Conner remains the shark in the tank.

“Naturally, I’m intimidated by Dennis,” Koch says. “I have profound respect and admiration for his ability and his ability to achieve a goal against all odds. He’s a formidable opponent.”

They are acquainted through sailing maxis against each other, but they are not buddies. Conner gives the impression he is not buddies with any of his rivals.

Asked what he thinks of Conner, Koch says, “Dennis marches to his own drummer, which is fine. I march to mine. They happen to be different drummers. Dennis has his own attitudes and values in life and I have (mine).”

Koch pauses, looks a reporter in the eye and smiles. “You’re not going to get me to say what you want me to say.”

Koch claims he isn’t financing the whole campaign out of his pocket.

“We are going after corporate funding, but not in the way (Conner) is. He’s going after it trying to sell advertising on spinnakers and things like that.”

Koch has said that although the rules now allow America’s Cup boats to carry limited advertising on their sails and hulls, he doesn’t plan to.

“We’re going after broad public support and gifts in kind, rather than ‘give us $2 million and we’ll wear your banner on our shirt sleeves.’ ”

William Ingraham Koch is one of four sons of the late Fred Koch, who was a co-founder of Koch Engineering Co. in 1925 and, according to Forbes, hit it big by developing a process to “squeeze extra gas from crude.”

But young Bill was a problem.

“I had to go a military school because I was a recalcitrant brat,” he says. “I refused to study, and the military school told me I wasn’t smart enough to get in unless I went to their summer school. That’s where I first picked up a sailboat.”

Although he wound up fourth in his class, “They kind of implied I wasn’t smart enough to go to MIT,” Koch says. “But I went to MIT and did very well there.”

When his father died in 1967, he left $250 million to his sons, who renamed the company Koch Industries and, with the second-oldest brother Charles in charge, expanded into chemicals, pipelines and ranching. Bill Koch wound his way from Wichita to Palm Beach.

“It’s a long, circuitous route. When I got out of MIT I had a chance to go back to Kansas and made the decision to stay in Boston in about a nanosecond. And then the winter started getting cold, and the taxes started getting even colder, and the business climate in Boston got even worse. I was looking around for a place to live. I looked at Texas, Arizona, California, Florida, Nevada and places like that. The best combination of climate, environment and taxes turned out to be Florida.”

In the early 1980s, according to Forbes, Bill Koch and his oldest brother, Fred, had a falling out with Charles and Bill’s twin brother, David. Bill and Fred didn’t like the way Charles was running the company. They sued for mismanagement.

Bill complained, “I’m one of the wealthiest men in America, and I had to borrow money to buy a house.”

Charles said Bill had “various psychiatric ailments.”

Charles and David bought out Bill and Fred. With half of his money, Bill founded the Oxbow Corporation, a diversified energy trader whose holdings include a Nevada geothermal plant that supplies power to Southern California, a wood-fueled power plant in Maine, a coal business and an offshore oil field off Point Arguello which he can’t tap into.

“Santa Barbara (County) won’t let us turn on the valves,” he says.

With all that, the average man wouldn’t have time to go sailing, at least not without carrying a phone in his pocket.

“I used to,” Koch says. “I’m trying to get away from that. It drives me crazy. Part of good management is getting a guy who can do the job better than you can, to give you time to go off and do other things. That’s what I’ve done in my business.

“I decided now, because of our past rapid growth and the state of the economy, I want to consolidate our business activities and digest what we’ve got so I don’t have to make any big acquisitions for the next couple of years . . . just keep what I’ve got going.”

If business holds no more challenges, sailing does, and Koch doesn’t think he should be written off just because he’s rich.

“I like doing things that people tell me I’m not good enough to do,” Koch says. “I’ve paid my dues.”